Pakistan retires record Rs4.72 trillion debt ahead of schedule: Finance Ministry

ISLAMABAD, Jul 14: Pakistan has retired more than Rs4.7 trillion worth of public debt before maturity through proactive liability management operations, marking the largest and most sustained early debt retirement programme in the country’s history, Adviser to the Finance Minister, Khurram Schehzad said Tuesday.

The latest Pakistan Investment Bonds (PIBs) buyback of Rs279 billion (around $1 billion) had taken the cumulative early debt retirement to Rs4.722 trillion (about $17 billion), Khurram Schehzad wrote on his social media account X.

He said the government retired Rs2.9 trillion in debt before maturity during FY2025-26, representing a 62 percent increase over the Rs1.8 trillion retired in FY2024-25, with 51 percent comprising central bank debt and 49 percent market debt.

He said, the active liability management strategy has helped reduce refinancing and rollover risks, lower debt servicing costs, improve liquidity and cash flow management, and strengthen investor confidence and fiscal resilience.

Schehzad said the average debt maturity had improved from 2.7 years in FY2023-24 to more than 3.8 years in FY2025-26, while the debt-to-GDP ratio declined from 75 percent in FY2022-23 to an estimated 68.5 percent in FY2025-26. He added that reliance on central bank financing had also reduced significantly.

He said the debt management strategy formed part of broader fiscal reforms aimed at strengthening macroeconomic stability alongside moderate inflation, improved fiscal and external balances, and enhanced public financial management.

The adviser said Pakistan was transitioning from conventional borrowing to proactive balance-sheet management, reducing rollover risks and shifting towards longer-term debt sustainability to ensure lower financing costs and stronger public finances.